Sales volumes continue to trend down; prices steady in May

Summary• 6,572
dwellings sold in May 2014, up 15.9% on April and down 14.8%
on May 2013• All but one region saw sales
increase compared to April, however all regions saw declines
in sales numbers compared to May
2013• Canterbury/Westland recorded another
record median high in May 2014

REINZ, the most up to
date source of real estate data in New Zealand, announced
today that there were 6,572 dwelling sales in the month of
May, up 15.9% on April, but down 14.8% compared to May 2013.
The national median price was $430,000 for the month of May,
an increase of $38,000 compared to May 2013, but a fall of
$2,250 from April 2014.

Real Estate Institute of New
Zealand (REINZ) Chief Executive Helen O’Sullivan says,
“The easing trend in the number of sales continues, with
all regions recording a decline in sales volume in May
compared to 12 months ago, and with this being the second
month in a row that we’ve seen this. We would normally
expect an increase in sales in May compared to April,
however, after taking seasonal factors into account the
increase was just 1.6%. This leads us to conclude that the
drop in sales in April due to the combination of Easter and
ANZAC Day has not created an offsetting increase in sales in
May.”

“The weakening trend is also showing up in the
number of days to sell with five regions seeing an increase
of a week or more in the number of days to sell between
April and May. At the national level the number of days to
sell is about in line with the 10 year average, however, for
a number of regions the result for May is noticeably higher
than the 10 year average.”

“While the growth in the
national median price is almost 10% compared to May 2013,
the driving force for this increase are the Auckland and
Canterbury/Westland regions. Together these two regions
represent almost 53% of all sales, but contributed 76% of
the uplift in the median price. Other regions such as Hawkes
Bay, Manawatu/Wanganui, Wellington, Central Otago Lakes,
Otago and Southland contributed just 6% of the uplift in the
median price, despite representing almost 25% of the
national sales total”

Sales
VolumesREINZ data shows there were 6,572
unconditional residential sales in May, a 15.9% increase on
sales recorded for April, but a 14.8% fall from May 2013.
May is typically the third strongest sales month after March
and November, however on a seasonally adjusted basis the
level of sales was up only 1.6% compared to April and down
12.6% compared to May 2013.

All but one region recorded an
increase in sales volume compared to April with Hawkes Bay
recording the largest increase of 35.1%, followed by
Waikato/BOP with 28.2% and Southland with 22.9%. Compared to
May 2013 all regions recorded a fall in sales volume with
Taranaki recording the largest fall of 34.8%, followed by
Wellington with a fall of 19.9% and Otago with a fall of
19.3%.

While the total number of sales was down 14.8%
compared to May 2013, the number of sales below $400,000
fell by 25.0%. This follows a fall in sales below $400,000
of 31.6% between April 2013 and April 2014. This may be
indicative of fewer sales in the lower price brackets since
the imposition of the LVR
restrictions.

PricesThe
national median house price fell by $2,250 (-0.5%), from
$432250 in April, to $430,000 in May. Compared to May 2013
the national median house price increased by $38,000
(+9.7%), with seven regions recording an increase in the
median price. 66% of the increase in the national median
price compared to May last year occurred in Auckland, with
Canterbury/Westland contributing 20% of the increase and
Waikato/Bay of Plenty contributing 7%. Together these three
regions accounted for 93% of the increase in the median
price between May 2013 and May 2014.

Canterbury/Westland
recorded the largest increase in median price compared to
May 2013, with a 15.3% increase, followed by Auckland with a
10.6% increase and Central Otago Lakes with a 7.3% increase.
Compared to April, Central Otago Lakes recorded the largest
increase in median price, up 10.9%, followed by Hawkes Bay
with 5.9% and Canterbury/Westland with 5.1%.

The REINZ
Stratified Housing Price Index, which adjusts for some of
the variations in the mix that can impact on the median
price, is 6.5% higher than May 2013, at 3925.1. The Auckland
Index has risen 9.4% compared to May 2013, with the
Christchurch Index up 9.0% and the Wellington Index up
1.1%.

Days To SellDwellings
took four days longer to sell in May compared to April at 38
days. Compared to May 2013, the median number of days to
sell was three days longer. Four regions saw an improvement
in the number of days to sell between May 2013 and May 2014,
with Central Otago Lakes recording the largest improvement
of 30 days. Auckland saw its number of days to sell ease by
three days.

For the month of May, Canterbury/Westland and
Auckland recorded the shortest days to sell at 34 days,
followed by Otago at 40 days, Wellington at 43 days and
Taranaki at 44 days. Manawatu/Wanganui recorded the longest
number of days to sell at 62 days, followed by Northland and
Hawkes Bay with 61 days. Over the past 10 years the median
days to sell for the month of May has averaged 39 days
across New
Zealand.

AuctionsNationally
there were 1,141 dwellings sold by auction in May
representing 17.4% of all sales and a reduction of 426 on
the number of dwellings sold by auction in May 2013. For the
12 months to March 2014 the total number of sales by auction
reached 15,440 or 20.3% of all sales, compared to 14,450 or
18.5% of all sales for the 12 months to May
2013.

Transactions in Auckland again dominated the auction
market in March, representing 70.1% of the national total of
auction sales. 31.1% of all dwelling sales in Auckland were
by auction in May, compared to 38.1% of sales by auction in
May 2013. Sales by auction in Waikato/Bay Of Plenty
accounted for 9.6% of the national total,
Canterbury/Westland accounted for 13.8% of the national
total, and all other regions combined accounted for the
remaining 6.5% of auction sales in May 2014.

Further
DataAcross New Zealand the total value of
residential sales, including sections was $3.553 billion in
May, compared to $3.09 billion in April, and $3.78 billion
in May 2013. For the 12 months ended May the total value of
residential sales was $39.55 billion.

The breakdown of the
value of properties sold in May 2014 compared to May 2013
is:

There
were 980 fewer (-25.0%) sales under $400,000 in May 2014
compared to May 2013, compared to a drop of 1,142 sales
(-14.8%) for all price brackets between the two
periods.

The monthly REINZ
residential sales reports remain the most contemporary and
up-to-date statistics on house prices and sales in New
Zealand. They are based on actual sales reported by real
estate agents. These sales are taken as of the date that a
transaction becomes unconditional and includes sales as of
5:00pm on the last business day of the month. Other surveys
of the residential property market are based on information
from Territorial Authorities regarding settlement and the
receipt of documents by the relevant Territorial Authority
from a solicitor. As such, this information involves a lag
of four to six weeks before the sale is recorded by the
Territorial Authority.

The REINZ Monthly Housing
Price Index is calculated using a technique known as
stratification, which provides an averaging of sales prices
for common groups of houses. This approach is considered a
more robust analysis of actual house price trends and was
developed in conjunction with the Reserve Bank.

The
REINZ Monthly Housing Price Index is based on a value of
1000 in January 1992, the first month for which electronic
information is available. Changes in the index represent
movements in housing prices, where the mix of sales between
the groups is held constant and are more likely to reflect
genuine property price
movements.

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